Member Info for Okehurst1

‘From their previous RNS they put the fund raise in perspective and differentiate between short term and long term need. They know that in the long term they will need to raise funds, but have "significant cash resources". I'd like to see the current and previous burn rate figures in ODX and what that money was used for’

We all would Marik, they had the perfect opportunity today they could have explained the current £650k a month cash burn ,then when the market opens Jag puts back £20,000 of the £220,000 he got from the company selling his options 12 months ago … and he buys £20k worth shares

That’s all he needs to do to steady the ship, manage the market and your shareholders

Marik,

Less than 2 weeks the CEO walked
They told us we burnt £2M in 12 weeks - same time
They don’t have significant cash - they have £2M and they have a court case with the Government chasing them for £2.5M , they have told us that as well

The BoD don’t do themselves any favours or us shareholders, there is no ‘ significant ‘ cash

Marik .

It’s all relative

They have £2M cash in hand & a £2M banking facility and they burnt £2M over last 12 weeks - they told us less than 2 weeks ago

We can guess it’s for stock but we just don’t know ?

Unless the FD has flogged the DHSC kit there is no way the word ‘ significant ‘ should have been used without clarifying the £650,000 a month cash burn

We have 24 weeks of cash left without the company explaining the £2M cash burn last 12 weeks

That is not significant?

We shouldn’t be surprised really Jag was the commercial director throughout Covid and now he’s running the show

* apologies should have added in header ‘ proceeds in health @ nutrition division ‘

The BoD don’t have a plan A , the RNS is pretty clear.

The solution is not Rocket Science

- Sell the loss making Division generating no revenue

- Reinvest in the profitable Division generating the only income the business enjoys

But the BoD can’t walk away from the Covid table, they are too close to the coal face they want another shot at it but not with their own £money, with ours.

Bite the bullet and get out of Covid testing, Omega gave it a go , it didn’t work out, it happens in business, move on and focus on what generates cash / profit

The BoD have raised £12M over the last 24 months to invest in production of Covid 19 testing and in that period the company have produced just £600,000 of cash receipts - that’s it £600,000 the balance is disputed by DHSC
HIV testing in H1 generated around £150,000

Sell Alva as a going concern and back to back the new owners buy the £17M kit off DHSC - Omega negotiate the price / terms and build into the sale price

With just £600,000 of cash in total collected from Covid testing this management team have not proven they can generate sales …. Plus the market is getting more competitive

Invest the proceeds into the Health Division, operate from Cambridge, we know marketing spend is 16% of growth, beef up the sales team, we have products to sell and expand into the Health / Wellbeing sector
Our interims December 2019 advised our gross margin was into the 60% range.

Raising £money to keep throwing at Covid testing is not the answer

I

Head of marketing - resigned after sale / pumping via Twitter
Ex Chairman - Resigned / sold
Commercial director - sold , rewarded with CEO role

All sold at relatively significant volumes 12 months ago

None as yet have bought back in even though the stock is down over 90%, in the last 24 months they tapped shareholders for close to £12M and pretty much wasted the majority.

It’s good this BB debates so we can see all points of view before making the call personally to support the £5M raise - if correct

I wouldn’t put anymore new money into Omega to fund Covid testing ,the BoD have not proven they can invest it wisely,

Captain
As it’s interim accounts they are unaudited so Going Concern would in theory not have to be highlighted - no auditor as such
As directors they can take the view - at the time - lthey said they expected £8M bank facility and they had £4M in hand

The bank in meantime having only facilitated £2M could well have removed / threatened to do so / maybe even wanted directors PG’s on any number of covenant issues that have come to light post event

Hence Jag& co doing the rounds

Shal
Good point

Jag made £200,000 selling his options 12 months ago

Even if he bought £20k ( 10% of his win )

Since Q4 2019 Omega in just 24 months have blown £10M of new cash - down to £2.4M bank today but they may have to pay back £2.5M at which point they have bathed the full £12M raised, quite remarkable really when you look at 2019 interims just over 2 years ago - below shows 2018 as well

Look at our latest interims, we have hardly judged the dial

Financial Highlights:
·; Revenue from continuing operations increased by 6% to £4.46m (2018: £4.22m)

·; Reported revenue, including discontinued operations, reduced by 15% at £4.46m (2018: £5.23m)

·; Significant improvement in gross margin from continuing operations - up by 5.8 percentage points to 67.5% (2018: 61.7%)

Other than the gross margin declining they have delivered very little with the £12M

To tap the market for another £5M is highlighting their horrendous performance over multiple years

Sell Alva , fund Health , no raise .

Jaf
The newish CFO said they were seeking up to £8M from the banks
It appears he only received £2M but we don’t the covenants?

DHSC £2.5M / funding the white elephant of Alva either or both could have broken the covenant with higher cash burn ?

Facilities can be withdrawn of course.

Benyon,

The antibody test hasn’t generated any sales of note - none of the associated / multiple antibody biotech tests

We can’t even get our £650k from DHSC via Abingdon
we only sold £1.25M of Covid testing throughout the 2 years of Covid and 50% of that hadn’t been collected

They need to cut their losses

Feels that way Simon

The BoD had a big £raise mainly for Covid, it didn’t work out but it didn’t affect them in their pocket as they sold out their options via pumping the price up to 90p- ironically Colin didn’t sell shares but had to walk the plank for the remaining Board members to keep the gravy train rolling

Alva is a now a ‘ white elephant’ they should consider disposing of, not throw more good money at it, the gamble failed commercially.

They advise Cambridge is the centre for the Health Division
suggest they could just focus manufacturing there and grow this business.

Raising £5M to ‘keep the lights on ‘ at Alva is not commercially viable for a business of Omega’s size

Apologies for long message below it was difficult to condense ,but it focus’s the mind
Global Health division and Alva is shot through its not viable
IF they try a £raise now it’s just to fund Alva in case Covid returns and they could utilise, based on their track record this will fail , they pretty much wasted most of the money from the last fund raise on Covid testing

Dispose of Alva - if possible
Ditto HIV

Fund Health @ Nutrition from disposals the only commercially viable division

If we look at the interims ;

‘Omega has substantial growth opportunities in the areas of Food Sensitivity, CD4 testing for the management of people living with HIV, and COVID-19 antibody and antigen testing and provides high quality in-vitro diagnostics products for use in hospitals, clinics, laboratories and healthcare practices in over 75 countries.

Financial Highlights:
· Revenue increased by 81% to £5.73m (H1 '20: £3.16m)

§ Health and Nutrition sales up 62% to £4.17m (H1 '20: £2.58m)

§ Global Health revenue up 170% to £1.56m (H1 '20: £0.58m)’

Global health includes HIV testing, strip out Covid Testing and on an annualised basis it’s £700k to £1M a year as Omega advised they have landed £800k HIV forward sales

Health / Nutrition is now the main division
Assume some growth in 2022 and we could be looking at
£10M to £12M top end
However this division requires 16% to 14% marketing costs relative to its revenue , on a straight line basis - assume £1.6M a year in £10M revenue

‘Selling and marketing costs increased by £0.3m to £0.81m (H1 '20: £0.51m) due to increased marketing resource and development of a digital solution within our Health & Nutrition business which will help increase direct customer engagement’

Sell Alva , shut Cambridge switch all manufacturing to Scotland ? Which way do they go?

Getting rid of Alva would reduce costs as they have taken in more space than required - storing DHSC kit !
Or do they just retain the current Cambridge site for Technical work only and stop the planned expansion and move all manufacturing to Scotland ?
If Covid back next Winter will they get sales ?
Is it worth the risk ?

Dispose of Global Health Division - it’s just not a viable division ?

Selling Alva and it’s capacity IF there was a buyer - Chinese who think it would help them retain U.K. Government contracts maybe ?Ditto sell off HIV testing, it’s not worth retaining Alva for the odd £800k gross HIV contract that comes in.

The £££ funds from disposals fund the growth of Health & Nutrition and this division then operates from Ely , which to be fair is the main business now and admin / establishment costs have been vastly reduced.

The management team could have £10M to £12M annual sales with Health / Nutrition ,give it a real go/ focus and drive growth, they don’t need Alva for this.

Unless they have received updated legal advice regarding the chances of being successful re £2.5M DHSC claim / or they have secured a manufacturing contract then there is no need for a raise

IF Share Prof is correct then it would be as Shal says

65% equity with existing shareholders

You know what to add

editorial

@

*************

.com

Captain

Here is the outlets email address editorial@*************.com

I only joined after seeing the headline article on Twitter - it’s free to join

The News report discussing Omega starts around 9mins

The presenter sounds convincing that he knows something, but who knows ?

I just can’t see it after an RNS saying no short term requirement just 9 days ago

He must have got his %% wrong way around

As the Captain said it needs clarifying one way or other - even though we had an RNS just 9 days ago saying no short term fund raise

Unless … they have had updated legal advice regarding the £2.5M to DHSC and their chances of winning has diminished ?

Would make sense, especially if the bank have withdraw the over draft as reported